Tips from the Wealthy on How to Get Rich

Jane Young, CFP, EA

Jane Young, CFP, EA

You don’t have to be incredibly intelligent and born into the Rockefeller family to attain wealth.   Below are some pointers commonly shared by wealthy people on how to manage your life and your money to reach financial independence.  There is no magic, achieving financial security involves straight forward, common sense actions to gradually build your net worth.

  1. Write Down Your Goals: It’s great to dream about what you want to achieve but to accomplish something you need to put your goals into writing and create an action plan to attain them.
  2. Control Your Expenses: Take the time to understand and manage your expenses and create a budget that supports your goals.   Spend less than you earn and develop good saving habits.  Keep your expenses in check when things are going well and avoid automatically increasing your expenses as your income grows.
  3. Don’t Buy Status: Don’t buy things to look rich or to impress your friends.  Most wealthy people drive older model used vehicles and live in modest homes.  Use your money to save for the future and spend on what really matters.
  4. Educate Yourself: Getting a good education and selecting the right career is a huge factor in attaining wealth.  A good education can result in a more rewarding job in a field you enjoy.  If you enjoy your work you are more likely to excel and earn more money.  If you are in a dead end job or a career you don’t enjoy consider going back to school to transition into a career for which you have more passion.
  5. Be Patient and Maintain a Long Term Perspective – The key to successful investing is having the patience to ride out fluctuations in the market. Resist the temptation to chase returns and time the market.  Invest for the long term and let your portfolio grow over time.  Stay the course and avoid making decisions triggered by emotions.
  6. Manage Risk and Return – Balance your desire for high return with the risk involved. Maintain a diversified portfolio with adequate short term liquidity to get you through rough spots in the market.   Rebalance on an annual basis to keep your portfolio diversified.  Take a disciplined approach to investing and avoid high risk investments that promise a return that may be too good to be true.
  7. Start your own business – According to Forbes nearly all of the people on their list of billionaires made their money through involvement with a business they or their family had started. Owning your own business may seem too risky but it can provide you with an opportunity for higher earnings and greater control over your financial future.
  8. Avoid Complex Investments – Avoid investing in anything that seems overly complicated or that you don’t fully understand. Complex investments often come with  greater risk, a lack of control, limited marketability, limited transparency and hidden fees.

Attend a Financial Fireside Chat with Jane and Linda on December 2nd to discuss “Year End Financial Planning Tips and Money Saving Ideas for the Holidays”

 

You and a guest are invited to a Financial Fireside Chat with Jane and Linda at our office, from 7:30 – 9:00 am on Thursday, December 2nd to discuss “Year End Financial Planning Tips and Money Saving Ideas for the Holidays.”

A Financial Fireside chat is an informal discussion over coffee and donuts, where our clients and guests can learn about various financial topics in a casual non-threatening environment. This is free of charge and purely educational. There will be absolutely no sales of products or services during this session. We will provide plenty of time for informal discussion.

The Fireside Chat will be held at the Pinnacle Financial Concepts, Inc. offices at 7025 Tall Oak Drive, Suite 210. Please RSVP with Judy at 260-9800.

We are looking forward to seeing you on Thursday, December 2nd to learn about and discuss some great year end financial planning ideas.

Your Money Bus is Coming to Colorado Springs

Your Money Bus is coming to Colorado Springs.

                               Get free professional advice, no strings attached

It’s never too late to secure your financial future.

Re: Free Non-profit Financial Education Event – Please share with friends, family and business associates.

All of us have family; friends and colleagues who are struggling to save money, eliminate debt and find jobs. Please share with them the opportunity to meet for a free one-on-one with local independent financial advisors when the national Your Money Bus Tour rolls into Colorado Springs on July 8th and 9th. Pinnacle Financial Concepts, Inc. is coordinating the Colorado Springs stop of this non-profit tour, visiting more that 25 cities. We will be volunteering at this event along with several other fee-only financial planning firms in town. The Your Money Bus Tour is sponsored by The National Association of Personal Financial Advisors (NAPFA) Consumer Education Foundation, TD AMERITRADE, Kiplinger’s Personal Finance magazine and FiLife.com.

The Your Money Bus Tour will stop in Colorado Springs at the Penrose Library (downtown) on July 8th from 12:00 – 7:00 and at UCCS, Lot 1 on July 9th from 12:00 – 5:00. At each stop, consumers can sit down with locally-based volunteer financial advisors to ask pressing financial questions. All Money Bus visitors will receive a free financial education kit, including a Kiplinger magazine and a budgetary workbook.

Forty percent of American families spend more than they earn and the average American with a credit file has more than $16,000 in debt, not including mortgages. We encourage people to stop byYour Money Bus to learn how to better save, eliminate debt and develop personal financial sustainability habits that will get them through and beyond these tough times.

The NAPFA Consumer Education Foundation is a 501c (3) organization committed to educating Americans on personal finance. Consumers need easy to understand information without any bias, sales, or conflicts of interest. All volunteer financial advisors are fee-only fiduciaries; nothing is being sold or promoted. This is strictly educational and free information for the public. The public is welcome to just stop by or make an appointment ahead of time.

For more information, visit www.YourMoneyBus.com and for up-to-date schedule information contact Krist Allnutt,krista.allnutt@perceptiononline.com.

Warmest Regards,

Jane M. Young, CFP, EA

10 Great Money Saving Ideas for the Holidays

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Jane M. Young, CFP, EA

1. Make a plan – who will receive a gift and how much do you plan to spend. Stick to your plan, keep track of your spending, and don’t spend on impulse.

2. Start early and give yourself plenty of time to select gifts and compare prices. We always over buy and spend too much when pressed for time.

3. Find creative ways to reduce the number of people for whom you plan to give gifts. Instead of buying gifts for friends make arrangements to make each other dinner or meet for an inexpensive happy hour. Remember that receiving a gift can be stressful and a nice a card or gesture may be more appropriate

4. Suggest that your family or group of friends draw names instead of buying gifts for everyone. It is difficult and expensive to buy gifts for a large number of people who already have everything.

5. Exchange white elephant gifts or favorite used books instead of expensive Christmas gifts. This is especially fun in conjunction with a Chinese gift exchange where everyone gets a chance to steal a gift from the other participants.

6. Gift a homemade present such as a homemade sauce, stew or soup, a painting, a knitted scarf, cookies, or a pie. You can capture a special moment by framing a photo or post card or you can create a calendar with some sentimental photographs.

7. If you have more time than money gift your services such as babysitting, home maintenance, faux painting, cooking a meal, house cleaning, shoveling snow, decorating advice, cooking lessons, a musical performance, or computer instruction.

8. Rather than providing all the food for your holiday party, ask your friends to bring a dish and a bottle of wine. Co-host a party with a few friends and share the cost. If you are planning a neighborhood party, consider a progressive party where each course is served at a different home.

9. Avoid purchasing expensive new holiday clothes. Make your existing wardrobe more festive through the use of inexpensive accessories and scarves. If you really need a new outfit check out your local consignment stores. Holiday and formal attire isn’t worn very often and is usually in good shape at consignment stores.

10. Lower the cost of Christmas cards and postage by using post cards, e-cards, e-mail or a simple phone call. It’s the thought that counts.

How to Save Money on European Travel

Jane M. Young, CFP, EA

I have decided to focus on a topic that is near to my heart and for which I have a great deal of first hand experience. Although in some cases you should do as I say and not as I do. I have a terrible weakness for European cafés and therefore spend too much money on meals and wine. We must choose our battles.

1.) Take the time to research air fares; it helps to be flexible on dates, times and locations. On my last trip we were able to save about $500 by trying a wide variety of routes and destinations – all within southern France. It is generally much cheaper to travel in and out of the same city and to book round trip tickets. If you need to travel one way within Europe there are several low cost, regional, airlines. If you don’t have too much luggage, consider a high speed train. I found train travel to be easy, fun, inexpensive and reliable. However, it can be difficult with a lot of luggage. It’s great for a day trip!

2.) Avoid travel during peak season, June through August. I usually travel in May or September to avoid the huge summer crowds and get better prices. Most hotels charge higher rates during the peak summer months. The service is also much better when there are fewer people to deal with. I also found that several historical sites don’t charge admission until June 1st.

3.) Save money by eating fewer meals in restaurants. Buy some bread, wine and cheese at the local grocery store and have a picnic in the park or at the beach. Reserve a hotel with a refrigerator to keep food fresh for breakfast and snacks. Most hotels offer breakfast but it can be very expensive, pick-up a baguette or a sandwich on the go and eat it as you stroll through the city. If you are limited for time, eating all your meals in a restaurant can use up a lot of valuable time.

4.) Save money when eating in restaurants by ordering the special of the day, sharing a meal or eating the seasonal local specialties. You can also save money by ordering the fixed price menu. If you are traveling to several towns in a region eat in the smaller less touristy villages. In addition to being less expensive, the food is better and the proprietors are more open. Seek out restaurants that are off the beaten path or ask a local for a restaurant recommendation. The prices will be lower, the food will be better and the ambiance will be nicer. You can eat with the Americans at home.

Save on wine by ordering a half liter or small pitcher of house wine. Most restaurants in France and Italy serve a half liter of house wine for about 5 euros; it’s the best deal going. The house wine is usually produced locally, many restaurants serve only regional wines. As they say, when in Rome….

5.) Take the time to research your lodging. You can save on lodging by staying in lesser know towns and staying in small locally owned Inns or Hotels. If you have the time, book an apartment for a week or two and take days trips from your base location. Another great way to save money is booking a business hotel over the weekend or a holiday; this can be especially helpful for airport locations.

There are several internet sites that can help you select good quality, inexpensive hotels such as Tripadvisor.com and Hotels.com. You can read reviews written by the people who have recently stayed there. A good guidebook on the region you are visiting can also be very helpful in selecting a hotel. Check out your selection with several sources to make sure the reviews are consistent.

6.) Think about what site-seeing you plan to do and what is really important to you. Admission into museums and various historical sites can be very expensive. When you visit cities with several sites that you want to see ask the tourist office if there is a museum pass or some kind of package deal that you can purchase. Be selective on what you pay to see – the inside of one mid-evil castle looks about the same as the next. You have limited time and there is so much beautiful scenery and architecture available to see absolutely free.

Ten Things You Can Do Now To Save Taxes in 2009

Jane M. Young, CFP, EA

Whew!! The 2008 tax season is finally over and we can relax. Well not exactly; this is a great time to prepare for 2009 taxes. A little effort now can help you save in 2009 and will make the process a whole lot smoother. Below are some ideas to help save taxes in 2009.

1. Create a folder for your 2009 tax documents and receipts. Create a file right now, and keep it somewhere convenient, to keep track of all those expenses and donations as they occur.

2. Start going through your old clothes and junk in the garage and donate it to a charity of your choice, if you itemize this can provide a sizable deduction. Remember, keep a log of everything you donate and get a receipt!

3. If you anticipate a substantial change in your 2009 income or if you owed a lot in 2008, now is the time to adjust your withholdings or your estimated payments. There is nothing worse than owing an unexpected $5000 at the end of the year.

4. Maximize your contribution to tax deferred retirement plans. Limits on the 401k, Simple and SEP have all increased this year. If you turned 50 this year you can now make catch-up contributions to your retirement plans including your IRA (assuming you are otherwise qualified).

5. Do you anticipate a decrease in income this year? You may be eligible to contribute to a Roth IRA or for a conversion from a Roth IRA to a traditional IRA. The recent drop in the stock market has made conversion to a Roth IRA very appealing. You can pay income taxes on your account now, while the balance is low. Then during retirement, when the market has recovered, you can take tax free withdrawals. In 2009 your AGI must be less than $100,000 to be eligible for a conversion.

6. Will you be paying college expenses sometime soon? If you live in Colorado you can invest the money you will be spending on college expenses in a 529 plan and deduct the contribution from your state income tax. If you have a couple kids in college this can be significant. Don’t worry; you can invest the money in something very safe within the 529 if you are worried about market volatility.

7. If you are a first time homeowner you may be eligible for a 10% credit up to $8000 if you buy a home by December 1, 2009. This is really more like an interest free loan because it must be paid back over 15 years. Additionally, it is subject to income limits. The credit begins to phase-out for joint filers with modified adjusted gross income of $150,000 or more.

8. Are you thinking about buying a new car? You may be able to deduct the sales and local tax if you buy the car this year. This is subject to an income phase out if your adjusted gross income exceeds $125,000. I know they take all the good stuff away from middle class wage earners.

9. If you own a business or work as a consultant, be sure to keep accurate and complete records. Don’t forget to track your mileage, the current deduction for business mileage is $.55 per mile. This is frequently overlooked or understated due to poor record keeping. Additionally, if you work in your home and have a dedicated work area you may want to claim a home office deduction.

10. Take advantage of the drop in the stock market to do some tax harvesting. Tax harvesting is taking advantage of a market decline to sell some of the dogs in your investment portfolio while taking a capital loss or reduced capital gain. Prior to the market drop, the sale of a particular security may have been prohibitive due to capital gains. Now you can take advantage of the drop in the market to clean up your portfolio or do some re-balancing of your asset allocation.